After The Introduction Of Venture Capital And Entrepreneurial Business Growth Subject Behavior

In the past30years of reform and opening up, China has experienced four waves of entrepreneurship. Each wave has more extensive coverage and more significant effect than the last. Along with the wave of entrepreneurship, it is the rapid development of venture capitalists. The local venture capitalists experienced four stages, including practice exploration, gradual rising, rapid growth. Nowadays, both the total amount of investment and the number of venture capitalists increase obviously. The vigorous development of venture capitalists and the continuous emergence of entrepreneur wave promote each other. In macro, venture capitalists provide a new financing channel for enterprises, and the booming of new ventures enhanced the sustainable development of venture capitaists. In Micro, after the introduction of venture capital, the financial support and value-added services are important forces to promote business growth. Although venture capitaists and entrepreneurs have many common interests, they are divided in opinion and perspective. Venture capitaists don’t always bring good news to the enterprise. The battle for control rights and bilateral moral hazard between capitalists and entrepreneurs makes the mechanism of enterprise growth more complex. The literatures give more attention to active behavior, such as innovation behavior of entrepreneurs and value-added services of investors. The principal-agent theory also have abundant research on moral hazard behaviors of the entrepreneurs. While the moral hazard behavior of investors has not be discussed enough, and it is rare to incorporate the two subject behaviors into a unified analysis framework. In addition, after the introduction of venture capitaists, the structure of control rights is bound to change. Although the existing research has rich discussion on the connotation and the optimal allocation of control rights, it is rare to explore the mechanism of control rights affecting business growth. Thus, it becomes urgent in theory and practice to analyze the influence mechanism of subject behaviors to business growth and explore the influence mechanism of control rights to business growth.Based on theory of control rights, optimal contract design, business growth, and behavior, this paper constructs the framework of control rights, subject behaviors and business growth. This paper uses the methods of literature research, questionnaire survey and case study to gather material and collect data. With qualitative and quantitative analysis, this paper discusses the research topic deeply.Firstly, literature review. This paper combs related theories, including behavior theory, business growth theory, and control rights theory, and summarizes the research perspectives, research findings, and research dispute. This paper focus on literatures about the relationship between subject behavior and business growth, and the relationship between control rights and business growth, literature review helps lay foundation for analysis of influence mechanism, and provides literature support to model construction and hypothesis proposing.Secondly, exploratory case study. Through the exploratory case study of three firms-Qihoo360. Jingdong Mall, Red Maternal and Infant Children, this paper analyzes the mechanism of subject behavior effect on business growth, and the effect of control rights. The case study shows that, productive behavior of entrepreneur has positive effects on business growth, and unproductive behavior of entrepreneur has negative influence on business growth. It also indicates that the support of investors has obvious promotion on business growth, while excessive intervention has negative effect. In addition, there is a strong correlation between structure of control rights and business growth. Because of industry limited and material constraints, the exploratory case study fails to include all variables assumed, and fails to verify the relationship among all the variables, but the conclusion is still valuable.Thirdly, construct theoretical model and propose research hypothesis. Based on literature review and combined with the results of exploratory case study, this paper construct research framework about subject behavior and business growth, and try to unearth the mediating effects of entrepreneur behavior and the moderating effect of control rights. And then, this paper proposes twenty-four hypotheses.Forthly, questionnaire survey and empirical analysis. This paper definites the important variables involved, such as productive behavior, unproductive behavior and agent behavior of entrepreneurs, supervision, support, speculation behavior of investors, competitive performance and potential performance. This paper design scale and questionnaire to measure them. Through descriptive statistics analysis, factor analysis, reliability and validity analysis, and multiple regression analysis of datas from121questionnaires, this paper verify the model and hypotheses.Based above research work, this paper draws the following conclusion:Firstly, it is verified that entrepreneurial behaviors have significant infulence on potential performance, and the productive behavior has significant infulence on competitive performance. Specifically, the productive behavior of entrepreneurs have a significant positive impact on potential performance, while unproductive and agent behavior has significant negative impact on potential performance. The productive behavior of entrepreneurs have a significant positive impact on competitive performance, while the effect of unproductive and agent behavior is not significant.Secondly, it is verified that investors’behavior have significant infulence on potential performance, but the effects of investors’behavior on competitive performance have not been verified. Specifically, supervision and support behavior have significant positive influence on potential performance, and speculation has significant negative impact on potential performance. The effect of support behavior and speculation on competitive performance is not significant. Contrary to expectation, the supervision behavior has significant negative effects on competitive performance.Thirdly, entrepreneur behaviors are metavariable between investors’behavior and business growth. Specifically, the productive behavior of entrepreneur plays a part intermediary role in supervision and support of investor effect on potential performance. Unproductive behavior and agent behavior of entrepreneur act a part intermediary role in speculation of investor effect on potential performance in enterprises.Forthly, the structure of control rights have moderating effect. Based on cluster analysis, the structure of control rights is divided into four types, including interference, trust, investor dominated and entrepreneur dominated. The regression analysis by grouping shows the structure of control rights plays moderating role in subject behavior effect on business growth.Compared with the literature, there are several innovations in this paper:Firstly, identify and extract several types of subject behavior. It is premise and foundation to clearify connotation and types of subject behavior. Based on literature reviews and case study, this paper extracts three types of entrepreneurs’behavior, including productive, unproductive and agent behavior, and three types of investors’behavior, including supervision, support, speculation. Then, this paper forms12items to measure entrepreneur behavior and investor behavior respectively. Analysis of exploratory factor and confirmatory factor shows the exploitation of scale has good reliability and validity, which can provide support for further quantitative study.Secondly, construct and verify the structure of control rights. Most empirical studies measure control rights using the proportion of equity, board seats and so on. It is relatively appropriate for mature enterprises, in which the shares are usually associated with control rights equivalently, and board seats have strong correlation with trie control right. But it may be not appropriate for new ventures, in which there are high degree of uncertainty, and the allocation of equity and control rights are not equal. In addition, the new ventures studied are not listed, so it is hard to collect disclosed information, such as the proportion of equity and board seats. Under this background, the author attempts to design a scale to measure control rights, and summarizes four types of structures by means of factor analysis and cluster analysis. The study provides a new research perspective for control rights. Thirdly, explore and clarify the mechanism of subject behavior effect on business growth. There are abundant research in the relationship between entrepreneurial behavior and business growth, and relationship between investors’behavior and business growth. Yet, literatures discuss investors’behavior and entrepreneurs’behavior separately, and give more attention to positive behavior, such as innovation of entrepreneurs, and support and value-added service of investors. This paper incorporates both entrepreneurs’behavior and investors’behavior, both positive and negative behavior into the research framework, which increase the comprehensive investigation of subject behavior greatly. In addition, this study digs into the interaction of subject behaviors. The research provides a new perspective to discuss the mechanism of subject behavior effect on business growth.Forthly, discuss and verify the moderating effect of structure of control rights. Literatures pay attention to the effect of control rights on business value, while there is no consensus in emperical researches. Some scholars believe that there is positive correlation between control rights and business value, while others think there are nonlinear relationship. In addition, some research conclusion from models need empirical support. Based on questionair and survey data, this empirical analysis strengthen and complete the literatures, and lay foundation for following research.